IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i11p5034-d1668546.html
   My bibliography  Save this article

Does Financial Inclusion Have an Impact on Chinese Farmers’ Incomes? A Perspective Based on Total Factor Productivity in Agriculture

Author

Listed:
  • Bingrou Huang

    (School of Economics and Management, Jiangxi Agricultural University, Nanchang 330045, China)

  • Shubin Zhu

    (Rural Development Research Center of Jiangxi Province, Jiangxi Agricultural University, Nanchang 330045, China)

Abstract

The development of inclusive finance brings opportunities for farmers’ income growth. Based on panel data from 30 provinces in China from 2014 to 2023, this study explores the relationship between financial inclusion and two dimensions of financial inclusion (the degree of inclusion and the service efficiency of the financial function) and farmers’ incomes by constructing a two-way fixed-effects model. Meanwhile, this study further discusses the impact of agricultural total factor productivity on this relationship using a mediated-effects model. The results show that financial inclusion, the degree of inclusion, and the service efficiency of the financial function significantly contribute to the growth of farmers’ income in both the short and long run. Meanwhile, farmers’ reliance on financial inclusion and the two dimensions of financial inclusion deepens with income, and this reliance is more pronounced in economically developed regions. Further, promoting agricultural total factor productivity is an important way for financial inclusion and the degree of inclusion to contribute to short- and long-term income growth for Chinese farmers.

Suggested Citation

  • Bingrou Huang & Shubin Zhu, 2025. "Does Financial Inclusion Have an Impact on Chinese Farmers’ Incomes? A Perspective Based on Total Factor Productivity in Agriculture," Sustainability, MDPI, vol. 17(11), pages 1-34, May.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:11:p:5034-:d:1668546
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/11/5034/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/11/5034/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bo Liu & Jing Zhou, 2023. "Digital Literacy, Farmers’ Income Increase and Rural Internal Income Gap," Sustainability, MDPI, vol. 15(14), pages 1-13, July.
    2. Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December.
    3. Rashmi Arora, 2012. "Financial Inclusion and Human Capital in Developing Asia: the Australian connection," Third World Quarterly, Taylor & Francis Journals, vol. 33(1), pages 177-197.
    4. Tian Liu & Guangwen He & Calum G. Turvey, 2021. "Inclusive Finance, Farm Households Entrepreneurship, and Inclusive Rural Transformation in Rural Poverty-stricken Areas in China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(7), pages 1929-1958, May.
    5. Sanderson Abel & Learnmore Mutandwa & Pierre Le Roux, 2018. "A Review of Determinants of Financial Inclusion," International Journal of Economics and Financial Issues, Econjournals, vol. 8(3), pages 1-8.
    6. Adegbite, Olayinka O. & Machethe, Charles L., 2020. "Bridging the financial inclusion gender gap in smallholder agriculture in Nigeria: An untapped potential for sustainable development," World Development, Elsevier, vol. 127(C).
    7. Heping Ge & Lianzhen Tang & Xiaojun Zhou & Decai Tang & Valentina Boamah, 2022. "Research on the Effect of Rural Inclusive Financial Ecological Environment on Rural Household Income in China," IJERPH, MDPI, vol. 19(4), pages 1-16, February.
    8. Yan Liu & Ya Deng & Binyao Peng, 2023. "The Impact of Digital Financial Inclusion on Green and Low-Carbon Agricultural Development," Agriculture, MDPI, vol. 13(9), pages 1-21, September.
    9. Bufan Zhang & Yifeng Wang, 2021. "The Effect of Green Finance on Energy Sustainable Development: A Case Study in China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(12), pages 3435-3454, September.
    10. Naveen K Shetty, 2008. "The Microfinance Promise in Financial Inclusion and Welfare of the Poor: Evidence from Karnataka, India," Working Papers 205 Keyword : Banking, Mi, Institute for Social and Economic Change, Bangalore.
    11. Johnson, Nancy L. & Ruttan, Vernon W., 1994. "Why are farms so small?," World Development, Elsevier, vol. 22(5), pages 691-706, May.
    12. Wei Yu & Huiqin Huang & Xinyan Kong & Keying Zhu, 2023. "Can Digital Inclusive Finance Improve the Financial Performance of SMEs?," Sustainability, MDPI, vol. 15(3), pages 1-16, January.
    13. Swamy, Vighneswara, 2014. "Financial Inclusion, Gender Dimension, and Economic Impact on Poor Households," World Development, Elsevier, vol. 56(C), pages 1-15.
    14. Yanling Li & Mengxin Wang & Gaoke Liao & Junxia Wang, 2022. "Spatial Spillover Effect and Threshold Effect of Digital Financial Inclusion on Farmers’ Income Growth—Based on Provincial Data of China," Sustainability, MDPI, vol. 14(3), pages 1-16, February.
    15. Shaheel Rafique, 2006. "Implications of informal credit for policy development in India for building inclusive financial sectors," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 13(1), pages 101-127, June.
    16. Sumit Agarwal & Chunlin Liu & Nicholas S. Souleles, 2007. "The Reaction of Consumer Spending and Debt to Tax Rebates-Evidence from Consumer Credit Data," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 986-1019, December.
    17. Dungey, Mardi & Doko Tchatoka, Firmin & Yanotti, María B., 2018. "Using multiple correspondence analysis for finance: A tool for assessing financial inclusion," International Review of Financial Analysis, Elsevier, vol. 59(C), pages 212-222.
    18. Lanhua Zhang & Manxiu Ning & Chaoying Yang, 2023. "Evaluation of the Mechanism and Effectiveness of Digital Inclusive Finance to Drive Rural Industry Prosperity," Sustainability, MDPI, vol. 15(6), pages 1-17, March.
    19. Berger, Allen N. & Demsetz, Rebecca S. & Strahan, Philip E., 1999. "The consolidation of the financial services industry: Causes, consequences, and implications for the future," Journal of Banking & Finance, Elsevier, vol. 23(2-4), pages 135-194, February.
    20. Joshua Yindenaba Abor & Mohammed Amidu & Haruna Issahaku, 2018. "Mobile Telephony, Financial Inclusion and Inclusive Growth," Journal of African Business, Taylor & Francis Journals, vol. 19(3), pages 430-453, July.
    21. Noelia Cámara & David Tuesta, 2018. "Measuring financial inclusion: a multidimensional index," IFC Bulletins chapters, in: Bank for International Settlements (ed.), The role of data in supporting financial inclusion policy, volume 47, Bank for International Settlements.
    22. Xue Wang & Guangwen He, 2020. "Digital Financial Inclusion and Farmers’ Vulnerability to Poverty: Evidence from Rural China," Sustainability, MDPI, vol. 12(4), pages 1-18, February.
    23. repec:bla:devpol:v:24:y:2006:i:s1:p:s51-80 is not listed on IDEAS
    24. Recep Yorulmaz, 2018. "An analysis of constructing global financial inclusion indices," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 18(3), pages 248-258, September.
    25. Yun Xia & Guozhang Xu, 2025. "Can Digital Financial Inclusion Promote the Sustainable Growth of Farmers’ Income?—An Empirical Analysis Based on Panel Data from 30 Provinces in China," Sustainability, MDPI, vol. 17(4), pages 1-22, February.
    26. Mandira Sarma, 2012. "Index of Financial Inclusion – A measure of financial sector inclusiveness," Competence Centre on Money, Trade, Finance and Development 1207, Hochschule fuer Technik und Wirtschaft, Berlin.
    27. Wang, Wencheng & Ning, Zinan & Shu, Yang & Riti, Miriam-Kamah J. & Riti, Joshua Sunday, 2023. "ICT interaction with trade, FDI and financial inclusion on inclusive growth in top African nations ranked by ICT development," Telecommunications Policy, Elsevier, vol. 47(4).
    28. Guangyou Zhou & Kuangxiong Gong & Sumei Luo & Guohu Xu, 2018. "Inclusive Finance, Human Capital and Regional Economic Growth in China," Sustainability, MDPI, vol. 10(4), pages 1-20, April.
    29. Quanda Zhang & Alberto Posso, 2019. "Thinking Inside the Box: A Closer Look at Financial Inclusion and Household Income," Journal of Development Studies, Taylor & Francis Journals, vol. 55(7), pages 1616-1631, July.
    30. Muhammad Usman Arshad & Zeeshan Ahmed & Ayesha Ramzan & Muhammad Nadir Shabbir & Zahid Bashir & Fahad Najeeb Khan, 2021. "Financial inclusion and monetary policy effectiveness: A sustainable development approach of developed and under-developed countries," PLOS ONE, Public Library of Science, vol. 16(12), pages 1-19, December.
    31. Sheng Xu & Jingwen Wang, 2023. "The Impact of Digital Financial Inclusion on the Level of Agricultural Output," Sustainability, MDPI, vol. 15(5), pages 1-17, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chei Bukari & Isaac Koomson & Samuel Kobina Annim, 2024. "Financial inclusion, vulnerability coping strategies and multidimensional poverty: Does conceptualisation of financial inclusion matter?," Review of Development Economics, Wiley Blackwell, vol. 28(2), pages 462-498, May.
    2. Thereza Balliester Reis, 2022. "Socio‐economic determinants of financial inclusion: An evaluation with a microdata multidimensional index," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(3), pages 587-611, April.
    3. Yingzheng Yan & Liupeng Chen & Ziwei Zhou & Yuanzhu Wei, 2025. "Digital financial inclusion and agricultural modernization development in China—a study based on the perspective of agricultural mechanization services," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-11, December.
    4. Carlos Sakyi‐Nyarko & Ahmad Hassan Ahmad & Christopher J. Green, 2022. "The role of financial inclusion in improving household well‐being," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(8), pages 1606-1632, November.
    5. Kuldeep Singh & Madhvendra Misra & Jitendra Yadav, 2021. "Corporate social responsibility and financial inclusion: Evaluating the moderating effect of income," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(5), pages 1263-1274, July.
    6. Mahamat Ibrahim Ahmat Tidjani, 2020. "An exploratory analysis of financial inclusion in Chad," Post-Print hal-03322905, HAL.
    7. Peterson K. Ozili & David Mhlanga, 2024. "Why is financial inclusion so popular? An analysis of development buzzwords," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(1), pages 231-253, January.
    8. Jamil, Abd Rahim Md. & Law, Siong Hook & Mohamad Khair-Afham, M.S. & Trinugroho, Irwan, 2023. "Financial inclusion and economic uncertainty in developing countries: The role of digitalisation," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 786-806.
    9. Giorgio Nuzzo & Stefano Piermattei, 2019. "Measuring financial inclusion in the main euro area countries: the role of electronic cards," Questioni di Economia e Finanza (Occasional Papers) 504, Bank of Italy, Economic Research and International Relations Area.
    10. Mingzhao Xiong & Wenqi Li & Brian Sheng Xian Teo & Jaizah Othman, 2022. "Can China’s Digital Inclusive Finance Alleviate Rural Poverty? An Empirical Analysis from the Perspective of Regional Economic Development and an Income Gap," Sustainability, MDPI, vol. 14(24), pages 1-18, December.
    11. Nkambule, Maxwell Banele, 2022. "The financial inclusion status of rural households in Eswatini," Research Theses 334766, Collaborative Masters Program in Agricultural and Applied Economics.
    12. Ha Son Nguyen & Chi Minh Ho & Anh The Vo & Duc Hong Vo, 2023. "The determinants of financial inclusion from the households’ perspectives in Vietnam," PLOS ONE, Public Library of Science, vol. 18(9), pages 1-20, September.
    13. Inoue, Takeshi, 2024. "Financial inclusion and income distribution revisited: New findings," The Quarterly Review of Economics and Finance, Elsevier, vol. 98(C).
    14. Kumar, Sumit & Pradhan, Kalandi Charan, 2024. "Socioeconomic and demographic determinants of financial inclusion in South Asia: Integrated policy for targeted groups of population," Journal of Policy Modeling, Elsevier, vol. 46(3), pages 655-682.
    15. Lee, Chien-Chiang & Lou, Runchi & Wang, Fuhao, 2023. "Digital financial inclusion and poverty alleviation: Evidence from the sustainable development of China," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 418-434.
    16. Anh The Vo & Loan Thi-Hong Van & Duc Hong Vo & Michael Mcaleer, 2019. "Financial Inclusion And Macroeconomic Stability In Emerging And Frontier Markets," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 14(02), pages 1-15, June.
    17. Giorgio Nuzzo & Stefano Piermattei, 2020. "Discussing Measures of Financial Inclusion for the Main Euro Area Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 148(3), pages 765-786, April.
    18. Dyah Titis Kusuma Wardani & Navi'ah Khusniati & Susilo Nur Aji Cokro Darsono, 2023. "Sociodemographic Effects on Financial Inclusion: Implications from Online Transaction in Developing-8 Countriesfrom Online Transaction in Developing-8 Countries Abstract: The world has reached the ind," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 69, pages 67-86, Juni.
    19. Huang, Zengjian & Wang, Leyi & Yu, Wensong, 2025. "Financial development, electronic payments, and residents' consumption: Evidence from rural China," Finance Research Letters, Elsevier, vol. 71(C).
    20. Anh L.N. Ngo, 2019. "Index of Financial Inclusion and the Determinants: An Investigation in Asia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(12), pages 1368-1382, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:11:p:5034-:d:1668546. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.